HAMBURGER HAFEN UND LOGISTIK AG Investor Presentation Commerzbank German Investment Seminar - New York City, January 2014 Berenberg Commerzbank & Goldman German Sector Conference Sachs Investment German Week Seminar Corporate August - New Conference 2013 York City, Hamburger January Hamburger 2014 Hafen und Hafen Hamburger Logistik und Logistik AGHafen AG und Logistik AG 1
Disclaimer The facts and information contained herein are as up to date as is reasonably possible and are subject to revision in the future. Neither the Company nor any of its parent or subsidiary undertakings nor any of such person s directors, officers, employees or advisors nor any other person makes any representation or warranty, express or implied as to, and no reliance should be placed on, the accuracy or completeness of the information contained in this presentation. Neither the Company, nor any of its parents or subsidiary undertakings nor any of their directors, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this presentation. The same applies to information contained in other material made available at the presentation. While all reasonable care has been taken to ensure that the facts stated herein are accurate and that the opinions contained herein are fair and reasonable, this document is selective in nature. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company as being accurate. This presentation contains forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which the Company operates. These statements generally are identified by words such as believes, expects, predicts, intends, projects, plans, estimates, aims, foresees, anticipates, targets and similar expressions. The forward-looking statements, including but not limited to assumptions, opinions and views of the Company for information from third party sources, contained in this presentation are based on current plans, estimates, assumptions and projections and involve uncertainties and risks. Various factors could cause actual future results, performance or events to differ materially from those described in these statements. The Company does not represent or guarantee that the assumptions underlying such forward-looking statements are free from errors and the Company does not accept any responsibility for the future accuracy of the opinions expressed in this presentation. No obligation is assumed to update any forward-looking statements. By accepting this presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company s business. This presentation is not a prospectus and does not constitute an offer or an invitation or solicitation to subscribe for, or purchase, any shares of the Company and neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. 2
Agenda Company profile and strategy Business development Financial performance Outlook 3
A Leading Port Logistics Company Company profile & strategy Container Intermodal Logistics - Container handling - Container transfer and storage - Value-added container services (e.g. repair, maintenance) - Rail- and road-bound transport services into the ports hinterland - Loading/Unloading of carriers - Operation of inland terminals - Special seaport handling of Bulk cargo, Fruit, RoRo, ConRo - Consulting & training - Warehousing and contract logistics - Handling of cruise ships Split 2012 (HHLA Group) By revenue 1,128.5 million By employees 4,915 Holding / Other / Real Estate 3 % Logistics 8 % Container 62 % Intermodal 27 % Holding / Other / Real Estate 13 % Logistics 6 % Container 60 % Intermodal 21 % 4
Business Model Growth potential and value creation based on vertical integration Company profile & strategy 5
Competing Ports of the North Range Container throughput and market share in 9M2013 Company profile & strategy NORTH RANGE PORTS IN TOTAL 28.2 million TEU (- 0.9%) NORTH SEA WILHELMSHAVEN <0.1 million TEU (Start: Oct. 2012) 0.1 % market share ROTTERDAM 8.8 million TEU (- 1.0 %) 31.4 % market share ANTWERP 6.4 million TEU (- 1.7 %) 22.7 % market share BELGIUM ZEEBRUGGE 1.5 million TEU (- 0.6 %) 5.3 % market share BREMEN/BREMERHAVEN 4.4 million TEU (- 6.5 %) 15.8 % market share NETHERLANDS DENMARK KIEL CANAL HAMBURG 7.0 million TEU (+ 3.6 %) 24.7 % market share GERMANY High density of port services along the Northern European coast ( North Range ) Strongest competition between the major North range ports, i.e. Hamburg (HHLA s main hub), Bremen/Bremerhaven (Bremen ports), Rotterdam and Antwerp The other handling sites are considerably smaller in terms of their local freight volume and the size of their catchment areas Hamburg benefits from its position as the most easterly North Sea port, which makes it the ideal hub for the entire Baltic region and for hinterland traffic to Central and Eastern Europe HHLA market share of ~20 % 6
Connecting Emerging Markets Favourable geographical location as most easterly North sea port Company profile & strategy FAR EAST / ASIA Strong and long-standing trade relations BALTIC SEA / EASTERN EUROPE Dense feeder connections via the Kiel canal CENTRAL AND EASTERN EUROPE Extensive rail network with own block trains and inland terminals Hamburg: interface with network Links two of the most important emerging markets in the world economy: Asia and Eastern Europe Cost advantages due to central location deep inland Highly efficient infrastructure with excellent hinterland connections to Central and Eastern Europe Volume data 9M2013 Container throughput up 5.1 % to 5,681 TTEU outperforming the market trend in the North range Container transport of continued activities notably up 21.1 % 7
Split of Seaborne Container Trade Seaborne container throughput 9M2013 of HHLA by region Company profile & strategy Other countries 2 % South America 5 % North America 7 % Africa 2 % Asia 52 % A leading port operator in Europe for Asia Rest of Europe 4 % Asia traffic accounted for 52% of total, up 5.4% Scandinavia 12 % The leading port in Europe for the Baltics Baltic Sea traffic achieved a volume share of 27.7%, up 10.1% Eastern Europe (Baltic rim) 16 % 8
Agenda Company profile and strategy Business development Financial performance Outlook 9
Business Trends January to September 2013 Business development Global Economy Global economic output and world trade volume stabilised at a low level Still slowed momentum of China s GDP in the 3 rd quarter Robust growth dynamics in CEE outperformed recessive Eurozone German economic growth gathered pace Global GDP and container throughput still developing on 1:1 ratio Sector Development Slight decline of volumes at North Range ports Shipping lines still burdened by overcapacities and ongoing phasing-in of ever bigger vessels New shipping line alliances (esp. P3) announced Continuing delay in dredging the river Elbe Low dynamics in European rail market Negative impact of flooding in May and June on rail connections HHLA Gain of market share in container throughput due to above average volume growth Ship size related modernisation of biggest facility CTB in Hamburg nearly completed Extra effort on increasing peak load conditions necessary Limited scope for price increases Gain of market share in container transport due to successful expansion of Intermodal network, esp. in new markets 10
Business development Capacities and Expansion in the North Range Further increase of terminal capacities despite overcapacities in the market NORTH SEA NORTH RANGE PORTS Capacity development within the North Range in 2014/2015 in million TEU Current capacity Planned capacity 1 in million TEU Current capacity Planned capacity 1 Rotterdam 15.5 20.6 Zeebrugge 2.7 3.3 Capacity potential to 2025 in million TEU 56.4 79.0 Antwerp 14.5 14.9 Wilhelmshaven 1.0 1.6 Hamburg 14.2 14.5 London Gateway 1.6 1.6 Bremen ports 8.5 8.5 Gdansk 1.0 4.0 1 First stage of concrete short-term expansion programmes (2014/2015) Source: Ocean Shipping Consultants (2012) 2013 potential 11
Growth in Ship Sizes Handling of ultra large container vessels (ULCV) require extra effort Business development Ship size development at HHLA container terminals FY2010 Q2 2013 ULCV fleet worldwide and order book until 2015 in service on order Doubling of ULCV until 2016 59% 49% 34% 31% Tripling of ULCV within three years 162 +38 200 +54 254 +27 296 +4 300 21% 7% <6,000 TEU 6,000 to 10,000 TEU >10,000 TEU (ULCV) July 2013 2013 2014 2015 2016 Source: alphaliner Implications Nautical restrictions tightened by increasing number of ULCV because of more width and draught Peak load conditions due to narrower time windows require more staff and equipment Capex requirements (suitable quay walls, gantry cranes etc.) Counteraction Enhancing service quality by continuous investment in technology and efficiency Expanding Feeder Logistics Centre (FLZ) to optimise and accelerate feeder handling Raising attractiveness of HHLA terminals by expanding hinterland network 12
Terminal Modernisation and Expansion Significant transition at Container Terminal Burchardkai (CTB) Business development Targets Ship size related action 4 new large ship berths (quay wall strengthening) Doubling of total capacity of 2.6 million TEU in 2005 Increasing productivity of existing terminal area Increasing quayside productivity Optimising of large container ship handling Capex: 450 million 15 new gantry cranes (tandem mode) Organisation and processes Integrated Terminal Control System (ITS) Adaption of work organisation Organisation and processes in progress in progress Fully continuous operation and centralised IT-based control system Capacity related action 29 automated storage blocks 1/3 Railway station 13
Intermodal Continues to Expand its Network Market entry to Switzerland Business development Connections (selection only) Trains per week, as of 10 October 2013 Hamburg Nuremberg/Munich 18 Hamburg Leipzig 12 Prague/Ceska Trebova Krems 6 Prague/Ceska Trebova Salzburg 4 Hamburg Ludwigshafen Basel 6 Hamburg Prague/Ceska Trebova 38 Bremerhaven Prague/Ceska Trebova 20 Rotterdam Prague/Ceska Trebova 12 D.A.CH strategy New connections between Hamburg, Ludwigshafen and Basel started in October 2013 First entry in the Swiss market completed regional coverage of HHLA s D.A.CH strategy* Since 2012 successful market entry already in Germany (Leipzig, Nuremberg, Munich) and Austria (Vienna, Krems, Enns and Salzburg) Further targets: Increasing the frequency of existing connections / providing new profitable connections on demand * Strategy for German speaking markets including Germany, Austria and Switzerland 14
Agenda Company profile and strategy Business development Financial performance Outlook 15
Volume Development Container throughput and Intermodal volumes Financial performance Container throughput (in TTEU) Intermodal volumes (in TTEU) 7,229 7,317 7,087 7,183 1.2% 5,844 1.4% 4,913 21.3% 19.0% -32.9% 5,405 5.1% 5,681 1,651 11.5% 1,841-18.5% 1,500 13.1% 1,696 11.3% 1,887 992* 0.1% 1,213 993* 949 729* 883 21.1% 2007 2008 2009 2010 2011 2012 9M12 9M13 2007 2008 2009 2010 2011 2012 9M12 9M13 * Pro forma: incl. impact of realignment (mainly deconsolidation of Transfracht) Realignment effect 16
Financial performance Revenue Base with Double-Digit Margins Subgroup Port Logistics Revenue, EBIT (in million) and EBIT margin (in %) Revenue EBIT EBIT margin Change in revenue 12.7% -25.9% 8.4% 14.2% -7.5% 1,299.2 1,152.4 962.9 1.042.8 1,190.6 1,101.2 5.6% 801.8 847.1 24.0% 26.3% * EBIT 2012 including impact of realignment (restructuring and deconsolidation effects) 277.0 341.3 15.3% 147.7 17.2% 16.4% 15.7% 179.9 194.8 153.6* 14.3% 114.8 13.0% 110.7 9M12 Pro forma: based on new ownership structure in the Intermodal segment. 2007 2008 2009 2010 2011 2012 9M12 9M13 17
Key Figures January to September 2013 Financial performance HHLA Group Subgroup Port Logistics in million 1-9 2013 Change 1-9 2013 Change Revenue 868.0 2.5 % 847.1 2.5 % EBIT 121.4-15.6 % 110.7-17.4 % EBIT margin in % 14.0-3.0 pp 13.1-3.1 pp Profit after tax and minorities 44.6-30.3 % 39.8-33.3 % Capital expenditure 81.8-46.4 % 72.5-49.6 % Employees as of 30.09. 5,015 2.0 %* 4,979 2.1 %* ROCE in % 11.9-2.1 pp * compared to 31.12.2012 18
Operating Expenses January to September 2013 Financial performance Total operating expenses: + 4.1% Throughput / transport growth: + 5.1% / - 6.9% in million 734.4 272.4 278.4 96.5 87.0 1-9 2012 +1.0% + 6.8% + 7.9% + 1.3% 764.7 275.0 297.4 104.1 88.2 1-9 2013 Cost of materials Personnel expenses Other operating expenses Depreciation and amortisation Cost of materials Mainly variable expense items Adjusted for the Intermodal realignment above volume development because of ramp-up costs for new rail connections and a new hub terminal Personnel expenses Rise due to collective wage agreement Additional work input caused by ongoing modernisation of CTB during current operations Peak load conditions required external staff Other operating expenses Increase in lease expenses Higher external maintenance expenses and consultancy fees for development projects Depreciation and amortisation Slight increase in property, plant and equipment In line with capex spent 19
Financial performance Financial Position Solid financial fundament Free cash flow Balance sheet as of 30 September 2013 in million Operating cash flow down 16.4 million 1,605.8 million to 138.3 million mainly due to one-off gain in the previous year Cash capex down 43.8 million to 52.6 million due to delayed delivery of gantry cranes Property, plant and equipment 60 % 35 % Equity Liquidity reserves as of 30/9: 184.2 million 23 % Pension provisions 58.3* 85.7* Other non-current assets 12 % 28 % Other non-current liabilities Current assets 28 % 14 % Current liabilities 1-9 12 1-9 13 Assets adjusted for transfer of liquid funds to/from short-term deposits Liabilities 20
Agenda Company profile and strategy Business development Financial performance Outlook 21
Forecast 2013 Outlook Market environment 1 Subgroup Port Logistics development Global economy (GDP) +2.9 % World trade +2.9 % Global container throughput +3.4 % Northern Europe box throughput -0.8 % Business environment Subdued economic situation in key markets Uncertainties with regard to market behaviour and strategies of shipping companies Peak load conditions due to the continuing delay in dredging the river Elbe Modernisation in Container segment, expansion in Intermodal segment and restructuring in Logistics segment 1 IMF, Drewry, Federal Office for Freight Transport 2 Commerzbank Results based on January new ownership German September structure Investment 2013 in Intermodal Seminar Hamburger Segment - New York Hafen City, und January Logistik 2014 AG Hamburger Hafen und Logistik AG 3 EBIT 2012 of 155.6 million after adjustment for one-off gain of 17.6 million (mainly on sale of stake in TFG Transfracht) Container volumes Medium single-digit throughput increase compared to previous year (2012: 7.2 million TEU) Growth in transport volume above market growth and above 1.1 million TEU (2012: 1.0 million TEU 2 ) Revenue Revenue following the Group target range of 1.1 billion to 1.2 billion (2012: 1.1 billion), revenue of the Real Estate subgroup (2012: 32 million) to be subtracted EBIT EBIT in a range of 142 million to 162 million (2012: adjusted EBIT of 156 million 3 ) Based on the development in the first nine months EBIT is expected to be at the lower end of this range Capital expenditure Investments in the region of 115 million (2012: 186 million), lowered due to delayed delivery of gantry cranes 22
Summary Conclusion 1 Competitive business model 2 Leading market positions 3 Favourable geographic location 4 High-quality service and technology level 5 Strong financial track record 23
Appendix 24
HHLA in the Port of Hamburg Appendix HHLA CONTAINER TERMINAL BURCHARDKAI HHLA REAL ESTATE FISCHMARKT HHLA CONTAINER TERMINAL TOLLERORT HHLA REAL ESTATE SPEICHERSTADT HHLA LOGISTICS CRUISE CENTER HHLA LOGISTICS ÜBERSEE-ZENTRUM HHLA LOGISTICS O SWALDKAI HHLA LOGISTICS HANSAPORT HHLA LOGISTICS ALTENWERDER HHLA CONTAINER TERMINAL ALTENWERDER 25
Container Terminal Activities Illustrative process chain Container Terminal Altenwerder (CTA) Appendix Ship-to-shore crane Rail-mounted gantries Truck loading area Vessel Surface transport by AGV Container storage area On-dock rail facility 26
Elbe Waterway Adjustment Administrative steps by the public authorities in charge Appendix Initiation of plan approval process Sep 2006 Technical planning Environmental studies Public hearings EU statement on council directive Flora Fauna Habitat Final plan approval Dredging start subject to main proceedings on legal objections Nov 2011 Apr 2012 Beginning of proceedings 15 July 2014 Federal Water and Shipping Authority & City State of Hamburg European Commission Federal Water and Shipping Authority Federal Administrative Court Adjustment of navigation channel 14.50 m tidal dependent / 13.50 m tidal independent, widening boxes Enabling a higher load factor, extended time slots and more flexibility for mega carriers 27
Appendix Container Segment January to September 2013 in million 1-9 2013 1-9 2012 Change Container throughput 1 5,681 5,405 5.1 % Revenue 538.1 523.2 2.8 % EBITDA 169.7 174.8-2.9 % EBITDA margin 31.5 % 33.4 % - 1.9 pp EBIT 103.4 107.7-4.0 % EBIT margin 19.2 % 20.6 % - 1.4 pp Segment assets 916.0 926.7 Throughput increase in Hamburg mainly driven by an upswing of Asian container traffic and a higher transhipment volume to the Baltic rim Volume growth at Container Terminal Odessa by gaining new shipping services Dilutive effect on average revenue per box by additional growth in lower margin feeder volumes Declining trend in storage fees due to increasing feeder volumes High additional costs and pressure on pricing power due to the continuing delay in dredging of the river Elbe EBIT affected by CTB modernisation and expansion 1 In thousand TEU 28
Intermodal Segment January to September 2013 Appendix in million 1-9 2013 1-9 2012 Change Container 883 transport 2 883 949-6.9 % 729 3 21.1 3 % Revenue 232.9 225.5 3.3 % EBITDA 34.6 48.2-28.2 % EBITDA margin 14.9% 21.4% - 6.5 pp EBIT 19.9 35.2-43.5 % EBIT margin 8.5% 15.6% - 7.1 pp 1 Transport volume based on the new ownership structure increased significantly by 21.1 % New connections in Germany, Austria and Poland in combination with a new hub terminal in Czech Republic strengthened market position Earnings temporarily burdened by ramp-up costs, fierce competition and operational losses of Polzug Negative impact of Elbe and Danube flooding Obligations for old contracts for traction services which expire in 2014 Segment assets 292.3 282.6 1 No impact of Intermodal realignment on first quarter results 2012 2 In thousand TEU 3 Applying the new ownership structure 29
Appendix Logistics Segment January to September 2013 in million 1-9 2013 1-9 2012 Change Revenue 68.7 69.3-0.8 % EBITDA 7.5 7.5 0.3 % EBITDA margin 10.9% 10.8% 0.1 pp EBIT 5.2 4.7 9.8 % Revenue down mainly due to the weak European economic situation Rise in earnings includes a one-off gain for selling a property Most of this one-off gain was used for restructuring measures in project and contract logistics Business developed diversely in the different areas EBIT margin 7.5% 6.8% 0.7 pp Segment assets 37.7 52.3 30
Financial Calendar IR Contact 27 March 2014 Annual Report 2013 14 May 2014 Interim Report January-March 2014 Phone: +49 40 3088 3100 Fax: +49 40 3088 55 3100 E-mail: investor-relations@hhla.de 19 June 2014 Annual General Meeting Web: www.hhla.de 14 Aug 2014 Interim Report January-June 2014 13 Nov 2014 Interim Report January-September 2014 31